House to Target 700 MHz Auction; Google May Bid

Subcommittee members are expected to question FCC commissioners on varied auction issues such as public safety communications and open access requirements, said the House Commerce Committee, the subcommittee’s parent. Committee Chairman John Dingell, D-Mich., told FCC commissioners in a letter Friday that the auction is of particular interest to members because “establishing the rules that will govern it may be the most important action that the Commission takes this year.” All 5 FCC commissioners have been invited to testify at the hearing, to begin at 9:30 a.m. in room 2123 of the Rayburn House Office Building.

Google, meanwhile, said it would commit at least $4.6 billion to bid in the auction if it gets its way on open access rules. CEO Eric Schmidt told FCC Chairman Kevin Martin in a letter that it will bid only if four conditions are added to the auction rules: (1) Consumers can use any devices on the networks of winning bidders. (2) Consumers can download any software applications. (3) Third-party resellers can acquire wireless services from a 700-MHz licensee on a wholesale basis “on reasonably nondiscriminatory terms.” (4) Internet service providers can interconnect to the network at any technically feasible point.

Schmidt said Martin’s compromise open access plan, supported by AT&T (CD July 20 p3), “falls short” by not including all four conditions or “meaningful implementation deadlines” sought by Google and others, Schmidt said. Schmidt said the sum Google pledged is based on his understanding that the FCC draft order includes a reserve price of $4.6 billion. “In short, when Americans can use the software and handsets of their choice, over open and competitive networks, they win.”

If “adopted together,” the four conditions could “spur additional forms of competition from web-based entities, such as software applications providers, content providers, handset makers and ISPs,” Google said in its “official blog” posted by Chris Sacca, head of special initiatives. Consumers would be the “big winners” because “as choices increase, prices come down and more Americans have access to the net.” Public Knowledge spokesman Art Brodsky said on the group’s policy blog “it was put up or shut up time and Google put up.” If Martin “wants his reserve price of $4.6 billion met, he will impose the full open access spectrum,” Brodsky wrote.

Google has delivered “an all or nothing ultimatum” that its conditions be met or it will skip the spectrum auction, AT&T said. “This is an attempt to pressure the U.S. government to turn the auction process on its head by ensuring only a few, if any, bidders will compete with Google,” said AT&T Senior Executive Vice President Jim Cicconi in a statement. CTIA accused Google of trying to get the auction “rigged with special conditions in its favor.” The wireless industry “welcomes all new entrants, but no company should be able to buy a custom-fit government regulation that suits their particular business plan,” CTIA said. Such “sparring” is what happens once the FCC suggests it is considering “conditioning and restricting what ought to be a clean auction,” said Randolph May, president of the Free State Foundation.

Dingell’s letter to the commissioners posed a series of questions, with the caveat that they needn’t write back by “please be prepared to discuss these matters at the hearing.” For example, he asked about a proposal to auction one block of spectrum with the condition that the successful bidder build a nationwide network giving priority to public safety. “If the commercial licensee suffers financial hardship that affects its ability to provide service, how would the Commission ensure that the public safety is not stranded?” he asked. “What would the Commission do if the commercial licensee and public safety cannot reach agreement on the terms of operation of the network?”

On open access, Dingell was “pleased to hear that the Commission is considering adopting a proposal that would permit consumers to have more control of their wireless devices so long as the network is properly protected,” he said. However, he asked if the Commission has considered whether open access would add costs to wireless providers or perhaps consumers, “either for handsets or for wireless service.” He also asked why the Commission is considering “applying the requirement to some spectrum blocks and not to others.”

Meanwhile, another committee’s chairman told Martin the FCC 700 MHz auction rules should set aside a commercial band, the successful bidder for which would be required to quickly build a public safety broadband network. “An open access and wholesale model on this spectrum would provide an optimum environment” for competition, said Rep. Henry Waxman, D- Calif., chairman of the House Oversight and Government Reform Committee. The committee has looked “extensively” at gaps in public safety communications in national emergencies, Waxman said. “If the Commission does not seize the opportunity the 700 MHz auction offers to solve this intractable problem, interoperable wireless communications for public safety could be out of reach for years,” he said.